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John Lott, the well-known foe of gun control, has written a response to the best selling Freakonomics by Steven Levitt. Lott's purpose is to show that the supposed failures of the free market detailed in Levitt's book are nothing of the sort. Typically, faulty data or analysis is the culprit. Take Levitt's most controversial claim that more abortions led to a decrease in violent crime in the 1990s. What about Levitt's thesis that real estate agents are like the Ku Klux Klan because they rely on "fear" to cheat their clients out of the rightful price for their homes? Readers will be convinced of the wrong-headedness of this argument after Lott's careful explanation of the economic value of an agent's reputation, and how he must preserve it if he wants more business in the future. Lott has a genius for putting things in economic perspective. For example, we all "know" that too much campaign money is spent in federal elections - $2.17 billion dollars in 2004. That is almost exactly one half of Proctor and Gamble's advertising budget for that same year. Perhaps that money, which largely decides how the government will allocate its two trillion dollar budget, is actually well spent. If you are worried about "double giving" to both sides of political races, don't be. Corporations are banned from giving in federal races, but most companies have both Republican and Democratic employees who donate individually. Double giving is almost nonexistent among PACs, whatever their affiliation. How about the drug companies? Why can Canadians buy drugs more cheaply than Americans? Because the companies rely on the big U.S. market to fund the incredibly expensive research needed to create a new drug. Politicians who want to give Americans the same "deal" that Canadians get will simply prevent new drugs from being found. Are the news media biased? Consider the fact that in 2004, 98% of CBS's employee donations went to Democrats. That may seem like a lot, but it fails to match the perfect score turned in by the workers at NBC. That's right, 100%! Fortunately, we have the so-called conservative FOX network, where Democrats were able to garner "only" 81% of contributions. Freedomnomics is an easy-to-digest treasure trove of economic analysis that will broaden and deepen the reader's understanding of our complex economy. It's the perfect antidote to simplistic headlines and the politicians who make them. (Regnery Publishing, 2007, 256 pp, $27.95) |
Lott shreds this argument with a mountain of data, showing that the real reasons for the drop were more police, more incarceration, and stiffer penalties for crime, including reinstatement of the death penalty.
